Country-Specific Experience, Host Country Government Corruption, And Outward Foreign Direct Investment By Korean Textile Firms

Abstract

This study explores how organizational learning and host country government corruption influenced outward foreign direct investment by Korean textile firms between 1986 and 1995, given that foreign direct investment decisions are not made in isolation from these two factors. The results provide empirical evidence for the recent organizational learning theory argument that the longevity of country-specific experience has a curvilinear relationship with foreign direct investment. In addition, the results suggest that the positive relationship between host country government corruption and foreign direct investment is moderated by the decreasing effect of host country–specific experience over time, suggesting that a dynamic framework of organizational learning could be used to cautiously qualify the existing bifurcated positive versus negative conclusion about the government corruption–foreign direct investment relationship.